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Airtel Africa Gets Another Cash Injection, Adds Customers

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Airtel Africa, which operates in 14 countries across the region and has nearly 100 million customers, has secured more external funding as it prepares for an IPO.

The regional unit of the giant Indian telco has struck an agreement for the Qatar Investment Authority (QIA), the sovereign wealth fund of the State of Qatar, to invest US$200 million by acquiring new shares.

Just last October, six investors have agreed to invest a total of $1.25 billion in Airtel Africa. (See Six Investors to Pump $1.25B into Airtel Africa.)

Airtel has now appointed a set of eight banks to handle the IPO process, whereby Airtel Africa will make its shares available on an as yet unspecified international public stock exchange.

The investment comes as Airtel Africa reports a 16.4% increase in its customer base during 2018, ending the year with 97.9 million customers, up from 84.1 million at the end of 2017. Africa revenues increased by 11.2% (at constant currency exchange rates) to $853 million from $767 million in the final three months of 2017. Its EBITDA was $317 million, up from $272 million in the same quarter a year earlier. Its EBITDA margin improved by 1.7 percentage points to 37.2%.

For the nine months from March to December 2018, Airtel Africa generated revenues of $2.47 billion, up 12% from $2.2 billion in the corresponding period of 2017.

It operates in 14 countries: Nigeria, Chad, Congo B, Democratic Republic of Congo, Gabon,Madagascar, Niger, Kenya, Malawi, Seychelles, Tanzania, Uganda, Zambia and Rwanda. The operator offers 3G services and Airtel Money services in all of those markets and 4G services in 11 African countries.

The number of mobile data customers across all Airtel Africa markets reached 29.3 million, up by 5.9 million in the final quarter of last year alone. "Data customers now represent 29.9% of the total customer base, as compared to 27.7% in the corresponding quarter last year," the operator reported. Data usage per customer during the final three months of 2018 was 1.25 GigaBytes, compared with 997 MegaBytes in the corresponding quarter a year earlier, an increase of 25.1%.

Airtel Money ended 2018 with 13.8 million users, up 32.1% year-on-year, while the total number of transactions during the final three months of 2018 increased by 76.9% to 835 million as compared to 472 million a year earlier. The total value of transactions on the Airtel money platform grew by 29.1% to $6.9 billion from $5.36 billion a year earlier.

Revenues from Airtel Money grew by 23% quarter-on-quarter to $67.7 million.

Airtel Africa now has 20,582 network towers (of which 15,734 are mobile broadband-enabled), up from 19,054 at the end of 2017. The company had 29,650 mobile broadband base stations at the end of 2018, compared with 16,863 at the end of 2017.

Capex during the final three months of 2018 hit $170 million, "largely on account of investment in data capacities and network modernization," the operator noted.

Ray Le Maistre, Editor-in-Chief, Light Reading for Connecting Africa.

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